Policy changes for Australian government contracts
From 1 July 2019, government contracts worth over $4m (incl. GST) will require an ATO Statement of Tax Record (STR) to be attached to all tenders. The STR is required for all entities listed on the tender, and potentially some sub-contractors as well.
“From 1 July 2019, government contracts worth over $4 million (incl. GST) will require an ATO Statement of Tax Record (STR) to be attached to all tenders.”
To be eligible for consideration in the tender process the contracting entity must have a satisfactory STR.
A satisfactory STR will be issued by the ATO from 1 July 2019 where you have:
- all your registrations up-to-date, including ABN, GST and tax file numbers
- lodged at least 90% of all income tax returns, fringe benefits tax returns and business activity statements on time within the previous four years, and
- no outstanding debts to the ATO, or an outstanding debt less than $10,000 to the ATO.
ATO debts which are greater than $10,000 are excluded where a payment arrangement is in place with the ATO.
If your Company does not have, or will not be eligible for, a satisfactory STR, you will need to make other arrangements in dealings with government contracts.
If you require any further information, please contact Martin van der Saag of this office.
Martin van der Saag
Partner
T: 02 9984 7774
E: martinv@northadvisory.com.au
About the author
Cayle Petritsch - Director & Wealth Advisor
Cayle Petritsch, Director and Wealth Advisor, works with our existing clients who have recognised the importance of business owners making strategic financial choices not only for their company, but for their personal finances too.
Cayle saw a great opportunity to expand North Advisory’s services into SMSF/superannuation, personal wealth management, asset protection services and other crucial personal finance facets that business owners need to consider.
His approach to wealth management allows you to receive highly personalised wealth advice. Working closely with Marius, Cayle understands the unique needs of every client, from their lifestyle and business goals to their retirement plans.
Key Takeaways
Tax compliance now a gate-keeper for big government contracts.
The STR requirement ensures only businesses with a reliable tax history qualify for tenders over A$4 million — increasing transparency and reducing taxpayer risk.
Businesses must maintain accurate, up-to-date tax records if they want to contract with government.
Compliance with registration, lodgement and debt-management obligations is essential.
The STR requirement raises the bar for subcontractors too — not just prime contractors.
This broadens accountability across the supply chain, making tax compliance a condition for all listed entities in a contract.
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Frequently Asked Questions
What new requirement applies to Australian Government contracts from 1 July 2019?
Any tender for a government contract valued over A$4 million (including GST) must include a valid Australian Taxation Office (ATO) Statement of Tax Record (STR) for the bidder — and potentially for any listed subcontractors.
What is an STR and why is it needed?
An STR (Statement of Tax Record) is a certificate from the ATO verifying a business’s compliance with its tax obligations. It helps the government assess if a business is tax-compliant before awarding large contracts.
What are the conditions to obtain a “satisfactory” STR?
To get a satisfactory STR, a business must have its registrations (ABN, GST, TFN) up to date, have lodged at least 90 % of required tax, FBT and activity statements on time over the past four years, and have no outstanding ATO debts — or have a manageable debt under A$10,000 (or an agreed payment plan if debt is higher).
Does this requirement apply to subcontractors as well as the main bidder?
Yes — the STR requirement can apply to all entities listed on the tender, which may include subcontractors, depending on the contracting structure.
What happens if my business cannot provide a satisfactory STR?
If you cannot obtain a satisfactory STR, you may be ineligible to be considered for the contract. In that case, you’ll need to make alternative arrangements or cannot bid for that government contract.
What policy changes affect Australian Government contracts and what should businesses know?
Recent policy changes for Australian Government contracts updated how bids are evaluated and awarded, often placing more emphasis on local content, compliance standards, and risk management. If I’m pursuing government work, I need to understand these changes so I can meet new requirements, remain competitive, and avoid compliance issues when submitting tenders.
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